Fred Krupp.
Fred Krupp has been piloting Environmental Defense Fund since he left private law practice in 1984. It hasn’t gone badly: Under Krupp’s leadership, the group has become an influential player in the deepest halls of power, with an annual budget that’s ballooned from $3 million to $71.8 million.
A substantial measure of EDF’s success and credibility stems from its crucial role in the development of the emissions trading program to reduce acid rain, passed in the 1990 Clean Air Act. Now Krupp is trying to replicate that success on a larger scale, stumping ceaselessly for passage of a cap-and-trade program to reduce greenhouse-gas emissions.
EDF’s critics, many found in the activist and netroots wings of the green movement, say Krupp has become so fixated on playing kingmaker again that he’s gotten too close to big business and too involved in insider politics. They cite EDF’s vigorous support for the Lieberman-Warner Climate Security Act, now making its way through the Senate, which aims for carbon targets weaker than most scientists recommend and includes a giveaway of up to $1 trillion to fossil fuel companies. (EDF responds that they are far from the only green group to express support for that bill.)
EDF backers note that Krupp was instrumental in pulling together the U.S. Climate Action Partnership, a coalition of more than two dozen powerful American corporations pushing for climate legislation; they note that he played a key role in brokering the TXU buyout that spared Texas eight of 11 proposed coal power plants; they point out that he has the ears of people with whom most environmentalists could never get in a room.
Love or hate EDF’s good-cop routine, it’s difficult to maintain much angst around Krupp himself. He is solicitous to a fault and almost boyishly earnest, with an enthusiasm that comes across clearly in his new book Earth: The Sequel. Cowritten with journalist Miriam Horn, the book is a guided tour through the innovators, entrepreneurs, and technologies that are flourishing in the fight against climate change — and stand to flourish on another level when a price is put on carbon. I spoke with Krupp in the Grist office.
There are lots of whiz-bang technologies in the book. If you were an investor, which one would you pick to make a material difference in the energy balance soonest?
I’m not sure I know the answer to that. One of the things I find so hopeful is that there’s such a bouquet of alternatives. Solar energy has a lot of potential. I do think about what Bernie Karl’s done in Alaska; this guy who owns a hotel becomes the first to make low-temperature geothermal work and now they are selling these units all over the world.
Hot water comes up with oil in a lot of oil wells. Normally the oil companies pay to separate it from the oil, but according to David Blackwell, a professor at [Southern Methodist University] down in Texas, there’s enough hot water in these abandoned oil wells that by harnessing it for electrical power you could avoid the need for building 13,000 megawatts in power plants. (This country, in its wisdom, stopped putting money into geothermal research a few years ago.)
All of these technologies have been suppressed by the fact that our country has not put a legal limit on dumping global warming pollution into the air.
Did you find a particular technology niftiest, in a gizmo-fascination sort of way?
Quite a few things, from the solar energy innovations — liquefying silicon to paint solar cells onto almost any surface — to the innovations in the biofuels arena.
The biochemists who started Amyris are already saving the Bill & Melinda Gates Foundation $200 million a year on the cure to malaria, by having yeast bioengineered to produce it. The idea that these guys have now set their sights on fossil fuel, I think that’s exciting.
Verenium has now built this plant in Louisiana to change fiber into sugar and digest that. They’ve hired the former headmaster of Anheuser-Busch to brew stuff. And I was intrigued to learn they’ve merged with Diversa, a company with 60 scientists who have been bio-prospecting for a decade, looking for extremophiles because they will contain the enzymes key to making biofuels out of wood chips.
Everyone seems focused on new technology. What about the changes in policy and practice that could make a dent in the problem with existing technology?
Absolutely. We have existing, off-the-shelf technologies: everything from cars to compact fluorescents to energy-efficient TV screens. Part of the answer is going to be building a stronger environmental ethic and awareness to get the information out there. And part of having a policy that creates economic incentives for efficiency and conservation as well as for new technologies is that it lifts all these boats.
But I would also say this: the reductions we need are so huge that we’re going to need a lot of the new technologies described in this book as well. Most scientists say the best we can hope for is to stabilize atmospheric concentrations [of carbon dioxide] at 450 parts per million, and it’s on that basis that they calculate we’ll need a 50 percent cut in emissions worldwide by 2050, with our country taking perhaps an 80 percent cut so that the formula works out.
We’re at 380 parts per million. We’re losing the polar ice caps. We’re losing the glaciers. We go to 450, we’re going to have lost every coral reef on earth. The idea that we should resign ourselves to that as a target is unacceptable. We’ve got to aim to stabilize greenhouse-gas emissions at today’s levels or lower than today’s levels, given the effects we’re seeing at today’s levels.
You are right, we need to deploy today’s technologies, but we also need to drive innovation as fast as possible, because we’re going to have to drive emissions down way faster than what even most scientists are now saying.
Almost all of the economic modeling that has been done on a cap-and-trade program for greenhouse gases shows energy prices rising and GDP growth slowing. That’s the cudgel used against the policy. What’s the answer to it?
These models have always been wrong. They have always underestimated the dynamism that occurs when government requires lower levels of pollution, especially when government uses a cap-and-trade system that introduces this incentive to hunt down the lowest-cost opportunities. They got it wrong by a factor of 10 in the acid rain debate.
Having said that, Nat Keohane, a great economist on our staff, looked at the six most prominent models and it turns out here’s what happens: the pessimist models say that instead of the economy growing from today’s levels to double today’s levels by, say, January 1 of 2030, it takes until February, or maybe June or July for the most pessimistic models. Over 22 years the total cumulative hit — according to the pessimists — is 1 percent, maybe a percent and a half. It is trivial.
So one thing we need to do is point out that the models are always wrong, but two, point out that even if they are right, it is a trivial cost to pay to have a future on planet Earth.
Lots of green groups are for 100 percent auctioning of [pollution] permits under a cap-and-trade system, as are Obama and Clinton. Economists say 100 percent auction is the most macroeconomically efficient system. Against that tide is Duke Energy, a coal utility that has an immediate financial stake in getting credits allocated, and John McCain, who has taken the Duke Energy line. EDF has come down on their side of that debate. Why? Is it a matter of compromising to get a bill, or is there a substantive case for backing off 100 percent auctions?
On allocation, I’m not sure that our position is as you described. What I know we’ve said is that 100 percent auction makes a lot of sense. We have said we need to get to 100 percent auction over time and that we could understand starting with something less than that. In USCAP — a coalition that includes NRDC, National Wildlife Federation, ourselves, and many businesses like GE and John Deere — our common position is that a significant portion of the allowances should be distributed for free in the beginning, transitioning to a complete auction. We haven’t said what “significant” is, or how fast.
I do think [Duke CEO] Jim Rogers has a point when he says that 95 percent of the electricity in Indiana is generated by coal, and if we want the cap to go into effect soon — I’d like it to go into effect next year, or the year after — they won’t have the opportunity to retrofit their plants that quick. So if you could find a way to avoid windfall profits for the utilities — and only if — in a transitional period, the allocations would keep the electric costs lower for those consumers in Indiana.
Those are big ifs.
We will have to be convinced, as will you, that what happened in Europe, where there were windfalls, doesn’t happen here. If we’re not convinced of that, we won’t be supportive.
Every year that we wait to put a limit on dumping into our atmosphere, we make the goal of stabilizing at today’s levels or less tougher to achieve; we make the cost go up. So we do think it’s unconscionable to wait if — and only if — we can get a strong bill sooner. The likelihood of getting a strong bill is going to be greater in 2009 than 2008; I would agree with that. But we owe it to our members and the American public and humanity to do everything we can to try to get a strong bill on the floor of the Senate now.
The international context plays into my thinking, because the world needs to conclude a new [climate] agreement in Copenhagen in December 2009, and one of the forces that should be there, pressing on the developing nations for the strongest possible agreement, is the United States. But until we enact a law, people laugh at us; they certainly don’t listen to us. If we can pass a strong bill in 2008, we should; if not, we damn well better make it the first thing that happens in 2009.
What could happen to the Lieberman-Warner bill that would cause you to pull support? Is there a red line?
We think the existing draft is a strong bill. We’d like to see the 2050 goal strengthened to 80 percent [cuts in CO2 emissions], but that’s not a live-or-die issue for us, because Congress is going to amend this goal 10 times between now and 2050. We’re more focused on the near-term reductions. The fact that [Senate Environment Committee Chair] Barbara Boxer [D-Calif.], a strong environmentalist, was able to shepherd a bill that gets 20 percent reductions by 2020 is terrific. We want to see at least the 20 percent reductions by 2020, and we want to see them starting immediately.
So it’s the urgency of action and the timetable and the level of the first reductions which will inform our judgment as to whether to continue to support this or pull our support.
What could a president do immediately, with executive power, without going past Congress?
We spend a billion dollars a day on oil, and our total research budget for renewable fuels in this country is a billion dollars a year. By executive action, the president could increase that research budget for renewable fuels. I’m not in favor of the government picking this winner or that winner — that’s how we got into this whole conventional ethanol mess — but more research money for geothermal, solar energy, that would be appropriate.
Since Sept. 12 of 2001, America has been waiting for leadership. Americans have been waiting to be asked to do something about our tremendous expenditures on oil, and the fact that this money goes to hostile regimes. The first thing a president can do is talk about the patriotic responsibility we have to buy fuel-efficient cars and energy-efficient appliances. Ask people to come together and take the steps the American public should have been asked to do after Sept. 11. People are still ready and understand the need, if only they are asked.
